CAIRO: Egypt’s economy grew by 5.6 percent in the first half of 2014/15 FY, roughly five-folds of the 1.4 percent growth achieved in the same period a year earlier, with the second quarter seeing 4.3 percent growth, the Minister of Planning announced Saturday.
Egypt’s real gross domestic product (GDP) hiked significantly to 6.8 percent in the first quarter of 2014/15 FY, the highest annual growth rate since the fourth quarter in 2007/08, according to Central Bank data.
Citing improvement in production and economic recovery, Planning Minister Ashara al-Araby stated Saturday, “Egypt’s real gross domestic product (GDP) grew by 5.6 percent in the first half of the current FY, after recording 4.3 percent growth in the second quarter.”
Araby attributed the rise to economic reforms adopted by the government over the past period, in order to improve investment environment, cut unemployment and control inflation, the statement read.
In 2014, the government decided to apply subsidy reforms, raising fuel prices by 78 percent, with a plan to double electricity prices over the next five years.
In 2013/14 FY, real GDP growth rate recorded 2.2 percent, compared to 2.1 percent during the previous FY, according to CBE data. Meanwhile, the government is targeting 3.2 percent growth rates in its economic development plan for 2014/15, as the economy gradually recovers from the dramatic slowdown triggered from political upheaval following the January 25 Revolution in 2011.
The World Bank (WB) said in its Global Economic Prospects report issued in January that Egypt’s economy is forecasted to grow by 2.9 percent during the current FY (2014/15.)
“Egypt has started to reform energy subsidies by raising electricity and fuel prices, which, together with revenue measures, should lower the fiscal deficit from 14 percent of GDP in the fiscal year ending June 2013, to 11 percent of GDP in two years,” the WB stated.
A more optimistic outlook was announced by the International Monetary Fund (IMF) which predicted that Egypt’s economy would grow by 3.8 percent in 2014/15 and to rise “steadily” to 5 percent in the medium-term.
The IMF also expected in a report issued Feb. 11 on the occasion of Article IV consultations’ conclusion that fiscal consolidation would slash the budget deficit below 8 percent of GDP by 2018/19.